Search form

Will Ancient IRS Technology Eat Your Tax Refund?

Marc Smith

By Michael Rainey

March 20, 2018

MOST POPULAR

An essential piece of software involved in processing millions of tax returns for the IRS is “old enough to be a grandparent,” reports Nextgov, and officials are worried about what would happen if it fails.

The Individual Master File, written in an antiquated programming language, dates back to 1957, making it the oldest tech system in the federal government, along with its cousin, the Business Master File, also operated by the IRS. (The next oldest tech system, according to the GAO, is the 54-year-old Strategic Automated Command and Control System at the Pentagon, which helps coordinate U.S. nuclear forces and runs on IBM computers and floppy disks from the 1970s.)

Former IRS Commissioner John Koskinen said the failure of the Individual Master File would be “catastrophic” if it occurred during filing season, potentially delaying the processing of individual tax forms and the issuance of refund checks. “This could have a devastating effect on more than 100 million taxpayers waiting on their refunds as well as the nation's economy, which sees some 275 billion dollars of refunds each winter and spring,” Koskinen said last fall.

The IRS has been working on a replacement for years, but the plan is six years behind schedule despite spending hundreds of millions of dollars. The agency now hopes to deploy a new system in 2021 and retire the old one in 2022, but says it needs 50 more people and $85 million to complete the work, which may be a challenge given the Trump administration’s efforts to cut funding for the IRS.